Macro Roundup (Jun 1)

SHANGHAI, Jun 1 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

The US dollar index weakened but remained at high levels around 94 with support from robust US data on employment and the personal consumption expenditure (PCE) price index. 

However, the US announced it will end the temporary exemptions on steel and aluminium duties for the European Union, Mexico and Canada, escalating the global trade war as more retaliatory moves are expected from these economies.

Base metals saw mixed trading. LME nickel retained momentum and gained 1.5%. Aluminium rose over 1%, supported by US tariffs, while zinc fell over 1%. SHFE nickel also soared and closed nearly 2% higher, while copper and lead inched up. The rest of base metals dipped.

China's official manufacturing purchasing managers' index (PMI) in May came in at 51.9. It was higher than April's 51.4, and the highest since last September. The composite PMI stood at 54.6 in May, compared with 54.1 in April.

The eurozone consumer price index (CPI) jumped 1.9% in May, above the estimated 1.6% and April's 1.2%. That was the highest growth since April last year and brought the headline inflation rate up to the European Central Bank's goal of just below 2%.

Core CPI excluding the volatile food and energy components improved to 1.1% in May, above the estimate of 1% and 0.7% in April. 

The US initial claims for unemployment benefits for the week ended May 26 stood at 221,000, lower from the expected 228,000 and the 234,000 of the previous week, reflecting nearly full employment in the labour market.

The claims have remained under 300,000 for 169 consecutive weeks, the longest period since 1969.

The four-week moving average of initial claims, viewed as a better measure of labour market trends as it irons out week-to-week volatility, inched up 2,500 to 222,250 last week. 

The US PCE price index in April rose 0.2% from March, and gained 2% from last year, both in line with expectations. The index, excluding food and energy, increased 0.2% for a third straight month, and met the expectation to rise 1.8% from last year. 

The PCE, which accounts for more than two-thirds of US economic activity, jumped 0.6% in April, the biggest gain in five months. This was mainly boosted by the purchasing of energy products such as gasoline. 

In April, personal income was up 0.3% after rising 0.2% in March. Wages increased 0.3% from March, while saving rates dipped to 2.8% from 3% in March.

US crude oil inventories during the week ended May 25 unexpectedly dropped by 3.62 million barrels, the biggest decline in three months, according to data from the Energy Information Administration (EIA). However, gasoline inventories increased by 534,000 barrels and refined oil inventories registered the largest gain in two months by 634,000 barrels on the week. 

Day ahead

Key factors to watch today include China's Caixin manufacturing PMI in May, Markit manufacturing PMI for eurozone and its countries, and the US nonfarm payrolls data in May. 

The US dollar is likely to rebound given a strong non-farm employment data today, while base metals are expected to face pressure from a strengthened US dollar. 

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